% of Cenvat Credit for input service on abated service like Restaurant etc. wef.01.04.16

[jai prakash]

Dear All,

Please guide me on following:

Wef 01.04.2016 Cenvat credit for input service tax will be available on proportionate basis. Is this correct?

Eg. In case of restaurant service, 40% is the taxable value under service tax. In case of rent paid for the restaurant only 40% will be considered for input credit. Suppose ₹ 1,00,000 paid as monthly rent than ₹ 40,000 will be considered for input credit.

Reference of section, rule will be helpful for me.

Thanks

Jai Prakash

AI Summary

Full Cenvat Credit Available for Input Services on Abated Services; No Rule Change Since April 1, 2016 A discussion on a forum addressed the availability of Cenvat credit for input services on abated services, such as restaurant services, effective from April 1, 2016. The query questioned whether only a proportionate amount of the service tax paid, based on the taxable value (e.g., 40% for restaurant services), could be claimed as input credit. Responses clarified that there was no amendment in the Cenvat Credit Rules, 2004, and that service receivers are eligible to claim the full amount of service tax paid, with abatement applicable only to the service tax payer.